June 2017 Posts

One surefire way to scare off investors and make a strategic blunder that could result in an unnecessary crash and burn is to be overly ambitious (or, likewise, too conservative) when modeling your company’s growth rate.

Investors want to see a revenue model that, at scale, demonstrates you’ve covered your fixed costs with enough margin that it makes it worth their while to invest in your company. You must show that the long term value (LTV) from a customer is greater than your costs to acquire them. And even if you can demonstrate this, your growth might still be too anemic to make investment worthwhile.